I’ve always been excited by using our knowledge of how our brains work to create better marketing, advertising, and sales strategies. That led me to write Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing (Wiley, 2011) as well as my blog Neuromarketing. I always emphasize practical applications, not theory. I’m the founder of Dooley Direct, a marketing consultancy, and I co-founded College Confidential, the leading college-bound website. That business was acquired by Hobsons, a unit of UK-based DMGT, where I served as VP Digital Marketing and continue in a consulting role. I’ve spent years in direct marketing as the co-founder of a successful catalog firm, and before that directed corporate planning for a Fortune 1000 company. You can learn more about me and my speaking at RogerDooley.com. Follow me on Twitter at @rogerdooley, or on Google Plus at Roger Dooley.

Did Maker's Mark Commit Brand Suicide?

For the last few days, the world of whiskey has been buzzing about the decision to cut the proof of Maker’s Mark bourbon from 90 proof to 84 proof. [UPDATE: After several days of public flogging, Maker's Mark has reversed its decision to water down its signature bourbon.] In an interview, the distillery’s chairman emeritus, Bill Samuels Jr., said that they had erred in their sales forecasts and diluting the bourbon was the best way to meet demand.

What Samuels is saying, in essence, is, “We’re selling all the bourbon we have, so to increase unit sales we’re going to water it down a little.”

Our customers won’t notice It gets worse. Samuels goes on to say that Maker’s Mark customers won’t notice the difference. That may be a true statement for most customers, particularly those that drink their bourbon in cocktails. Indeed, Samuels says their professional tasters couldn’t tell the difference, though he didn’t elaborate on the tasting procedure. The problem with this is saying that the customers won’t notice.

Do you really want to go on the record as saying the palates of your customers are so unrefined that they can’t tell the difference when the whiskey is diluted? In reality, in blind taste tests most people probably can’t tell the difference between similar colas, beers, whiskeys, etc. Nevertheless, brands still strive to maximize their taste differentiation. Can you imagine Coke saying, “We could change our formula a little, or even put Pepsi in our cans, and not many of our customers would notice.”?

A Missed Opportunity Maker’s Mark could have used their looming shortage as an opportunity to make their brand stronger. If they encountered sporadic shortages for a period of years, they could raise prices and leverage the scarcity to take the brand up a notch in prestige.

Knob Creek Advertises Shortage

That’s exactly what Knob Creek, also part of Beam, Inc., did when they faced the same problem as Maker’s Mark a few years back. Did they water down their whiskey? Did they stop advertising (the product was sold out anyway) to boost profits? No – instead, they leveraged multiple psychological triggers by advertising the shortage (see Scarcity in Action).

First, they used scarcity – our brains prefer scarce things, even when they are identical to the same items in larger supply. Second, Knob Creek attributed the shortage to customer demand exceeding the limited supply, invoking social proof. And, in the process, they did some old-fashioned product pitching, saying, in effect, “Our product takes years of hard work to produce, and we’re not going to take any shortcuts.”

Maybe I’m not Maker’s Mark target market – even before this fiasco, I preferred Knob Creek (or Elijah Craig) – but it seems to me that Maker’s Mark took absolutely the wrong approach to their product shortage, and compounded that failure with terrible messaging.

What do you think – will this blow over in a week or two? Or has permanent damage been done to the brand? (And, for you bourbon enthusiasts, what’s your favorite?)

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Thanks for the insights, Shaun. In reading the interview, I imagined a disconnect between the “party line” and the old-fashioned bourbon guy who was spouting it. It seemed to me like someone who grew up making premium bourbon would choke on the words, “The customers won’t notice…”

Roger good read, do you believe that other liquor companies will maybe have to resort to doing this sort of thing? Or what checks and balances do you believe liquor companies will put in place from this incident?

There’s certainly a lesson for other spirits companies here… I think premium brands will need to take the Knob Creek approach and celebrate their lack of inventory, or find a more subtle way to address the problem. Cheaper brands, which likely have fewer inventory problems anyway, probably don’t have to worry if they tweak their product.

I’m thinking this actually might be a shrewd business decisions. Maker’s at this point, to those of us who really care and know about bourbon and American whiskeys, is on par with Jim Beam and Buffalo Trace…a solid, consistent option that you’re going to be able to find at most any bar or restaurant. However, go to an establishment with even a modest bit more variety…say Blanton’s and Eagle Rare (Trace Distillery brands) or Baker’s and Basil Hayden’s (Beam Distillery brands)…and Maker’s is no longer a consideration.

The Maker’s distillery, I think, realizes that Maker’s Mark can no longer compete as a premium bourbon so there is no real cause in keeping it at 90 proof and thus 10-20% more expensive than Jim Beam or Buffalo Trace. Make Maker’s the common man’s option and market Maker’s Mark 46 to appeal to us whiskey snobs.

Mind you, none of this is to say that Maker’s handled this well…you simply cannot say that your drinkers won’t be able to discern watered-down whiskey. Brand suicide? No…PR-stupid? Yes.

As to my favorite…I’ve become a very big fan of Willett, though I am more of a rye man…for the money, there is no better whiskey than Bulleit Rye.

I think Bulleit Bourbon is pretty great, too. Too me, Maker’s Mark has always been overpriced for purposes of snob appeal anyway. The answer to the Forbes question is “yes.” And my prediction is that Maker’s will eventually imitate “New Coke” and reverse their disastrous decision to try to undo the damage.

Roger — I stopped buying Makers right after my first taste of Buffalo Trace; I find Trace equally tasty, and about 20% less expensive. I’d prefer Woodford Reserve, but I don’t find the minor (to me) differences in taste adequate compensation for the significant increase in cost…at least, for “home use.” (BTW, a recent life lesson is that “cheapgruntlabor” is a close equivalent to “early retirement” if one’s wife still works full time, AND raises livestock….)

Very few ryes commonly available here in the Pacific NW: I recently discovered how much I like a good sazerac, so I’ve been looking for a “reasonably” priced rye to use at home. I decided to test Templeton Rye against Old Overholt (a batchelor uncle’s favorite). Even in a Sazerac, there’s a noticeble advantage to Templeton; neat, Overhold is drinkable only on a “gag” basis compared to Templeton.

This is definitely a ham-handed way to solve the “problem.” There is a good piece in the latest New Yorker about the Bruichladdich Scotch whisky distillery including how it handled issues with scarcity of its product when they reopened in 2001.Which brings me to the solution for Makers Mark drinkers: Balvenie Doublewood 12 y.o. single malt scotch with a splash of water on the rocks. (Whenever a Scotch purist tells me the ice is going to dilute my Scotch, I tell them “Its not going to last that long!”)